HUNTINGTON — West Virginia’s oil and natural gas industry advocates say the COVID-19 pandemic was a challenging year, but it also created opportunities.
“The pandemic has affected all of us, and our industry, much like every sector, is adapting,” said Charlie Burd, executive director of the Gas & Oil Association of West Virginia (GO-WV). “While many more challenges lie ahead, we also see opportunities.”
Burd says the biggest challenge is what he called “the attack on all oil and gas.”
“It’s alarming,” he said. “The United States was and can return to being energy independent … even more, energy dominant. But policies enacted since January place this status in jeopardy. The shutting down of pipeline that carry West Virginia produced natural gas to markets outside the state is very costly in terms of jobs, investment, tax revenue at all levels and in investor confidence.”
Burd said labor numbers suffered with the shutdown of several pipeline construction projects.
“The rebounding of those jobs will be slow and contingent on the issuance or re-issuance of environmental permits,” he said. “Jobs associated with drilling are returning as rig count remains steady and more drilling is taking place.”
Last week, the American Petroleum Institute (API) released an analysis of the oil and natural gas industry’s “vast economic impact” on West Virginia and highlighted its importance to the state’s post-pandemic recovery.
The study, prepared by PricewaterhouseCoopers (PwC) and commissioned by API, is based on the latest government data available and shows the industry supported more than 82,000 total jobs across the state’s economy in 2019.
“This was 32,300 direct and 49,700 indirect jobs or 9.2 percent of West Virginia’s total employment,” Burd said. “The industry also generated an additional 1.5 jobs elsewhere in West Virginia’s economy for each direct job.”
The study showed this provided $5.2 billion in labor income — $2.5 billion direct and $2.7 billion indirect — to West Virginia, or 11% to the state’s total labor income.
The natural gas industry in the Mountain State generated $11.2 billion toward the state’s gross domestic product, or 14.2%.
“These are incredible numbers, and they demonstrate just how important natural gas is to West Virginia’s economy and the nation,” Burd said. “The U.S. will rely on natural gas as it recovers from the pandemic.”
As economic activity, travel patterns and consumption continue to grow during the post-pandemic recovery, the U.S. Energy Information Administration expects global oil and liquid fuels consumption to surpass 2019 levels in 2022.
“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity in West Virginia,” API President and CEO Mike Sommers said. “This study reinforces that West Virginia’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”
Burd says he remains hopeful for the industry and oil and natural gas production continues to grow.
“I hope that our leaders in Washington D.C. will reach a more rational conclusion that the need for oil and natural gas is vital to our national security in terms of transportation fuels, power production, military needs, medicine and pharmaceuticals, as a source of heat for homes and businesses, cooking and food preparation, and finally all types of manufacturing of metals, plastics and petrochemicals,” he said.
Burd says drilling technology continues to improve.
“Specifically the ability to drill longer horizontal laterals, use improved hydraulic fracturing procedures, and employment of the latest well completion technology,” he said. “And all accomplished with the greatest attention to the environment … air, water and land disturbance.”
According to the EIA, in 2019, West Virginia was the sixth-largest natural gas-producing state in the nation, with an output exceeding 2 trillion cubic feet.
In West Virginia in 2019, 5.9 billion cubic feet per day (Bcf/d) of marketed natural gas was produced and 0.6 Bcf/d was consumed. No other state had a higher ratio of natural gas production to consumption in 2019, according to the EIA.
The top 10 natural gas producers in the state were Antero Resources Corp. with 907,829,158 MCF (thousand cubic feet); SWN Production Company LLC at 272,604,650 MCF; EQT Production Co. at 258,879,130 MCF; HG Energy II Appalachia LLC at 109,764,557 MCF; Tug Hill Operating LLC at 89,021,823 MCF; Northeast Natural Energy LLC at 86,666,446 MCF; Diversified Gas & Oil at 82,322,122 MCF; CNX Gas Company LLC (plus Consol Gas Co.) at 66,143,347 MCF; Jay-Bee Oil & Gas, Inc. at 62,546,634 MCF; and Arsenal Resources LLC at 44,815,686 MCF.
Natural gas production increased more than 17% from 2018 to 2019, according to Burd, and oil production grew by more than 30%.
The top 10 oil producers in the state were SWN Production Company LLC with 7,079,645 barrels; Antero Resources Corp. with 3,572,580 barrels; Chevron Appalachia LLC with 1,875,319 barrels; Tug Hill Operating LLC with 1,773,387 barrels; HG Energy II Appalachia LLC with 1,009,994 barrels; EQT Production Co. with 564,074 barrels; Jay-Bee Oil & Gas Inc. with 358,767 barrels; CNX Gas Co. LLC with 175,888 barrels; HG Energy LLC with 122,304 barrels; and Triad Hunter LLC with 97,067 barrels.
Burd says oil and gas severance tax receipts in fiscal year 2020 topped $125 million. The majority of the severance — 90% — goes to the state, while 75% of the remaining balance is disbursed to gas-producing counties and the other 25% is distributed to all counties and municipalities throughout the state based on population.
Burd said as the industry continues to grow, it continues to make a high impact on the state’s budget and local economies.
“Property tax contributions increased by more than 24% over 2019 to over $162 million,” he said.
Burd said West Virginia continues to see growth in the oil and natural gas industry, which includes yearly increases in production for over a decade.
“Our industry is responsible for more than $2.86 billion in state severance and property tax revenue since 2008,” he said.
According to the West Virginia Oil and Natural Gas Association, in fiscal year 2020 Cabell County produced 719,620 MCF of gas and 8,467 barrels of oil, contributing $103,716 in property tax and $156,823 severance tax. Kanawha County produced 11,668,944 MCF of gas and 49,467 barrels of oil, contributing $1,356,791 in property tax and $354,918 in severance tax.
Wayne County produced 3,587,508 MCF of gas and 12,712 barrels of oil, contributing $556,029 in property tax and $82,094 in severance tax. Putnam County produced 3,106,502 MCF of gas and 2,325 barrels of oil, contributing $385,052 in property tax and $100,651 in severance tax.
Boone County produced 5,074,825 MCF of gas and 4,932 barrels of oil, contributing $648,064 in property tax and $59,084 in severance tax. Logan County produced 8,776,064 MCF of gas and 108 barrels of oil, contributing $902,034 in property tax and $92,562 in severance tax.
Lincoln County produced 7,039,318 MCF of gas and 109,960 barrels of oil, contributing $1,121,175 in property tax and $65,498 in severance tax. Mingo County produced 10,368,244 MCF of gas and 5,125 barrels of oil, contributing $1,027,546 in property tax and $83,010 in severance tax.
The growth is not without its problems, however.
“Commodity prices are decreasing. Prices will remain low for the foreseeable future,” Burd said. “The economy will struggle as we work to recover from the pandemic’s toll. Burdensome lawsuits and imprudent policies have hindered pipeline projects and cut pipeline construction jobs in half.”
Burd says the state must encourage the use of natural gas.
“We must adopt policies that make West Virginia competitive with its neighboring states,” he said. “We must work to encourage new facilities that will use our products within the state and boost investment and employment.”
Burd says downstream investment represents a huge economic multiplier.
“Natural gas producers and natural gas utilities cannot succeed alone,” he said. “Companies in the state’s natural gas industry have come to see the strength in shared success. That’s part of the reason we created GO-WV. We want a unified voice as we spread our message throughout the state and beyond. It’s truly a message of hope for the Mountain State.”
"Oil" - Google News
August 15, 2021 at 11:00AM
https://ift.tt/3si5lpa
Despite challenges, oil and natural gas industry advocates see opportunities - Huntington Herald Dispatch
"Oil" - Google News
https://ift.tt/2SukWkJ
https://ift.tt/3fcD5NP
Bagikan Berita Ini
0 Response to "Despite challenges, oil and natural gas industry advocates see opportunities - Huntington Herald Dispatch"
Post a Comment